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Accommodation sharing

Accommodation sharing is renting part or all of a property for a short period. It can include your primary residence or your secondary residence. It also includes any rentals facilitated by a third party, a website, or an app.

Income tax implications of accommodation sharing

All money you receive as a result of an accommodation sharing arrangement is taxable for income tax purposes and you should report it as rental income when you file your income tax returns. Individual situations vary and the tax implications could be different depending on the specific facts of the situation.

Rental income

When you change the use of a property or part of a property (for example, from using it personally to renting it out or vice versa), there could be tax consequences. For more information, go to Changes in use.

How to report rental income on your income tax return

You should report any income you receive from renting property or accommodation sharing on your income tax return and file Form T776, Statement of Real Estate Rentals with the Canada Revenue Agency (CRA). For help on filing a statement of rental income and expenses, go to Completing Form T776, Statement of Real Estate Rentals.

Make sure you keep detailed records of all rental income you earn and any expenses you incur to earn that income in case the CRA asks to see them.

How to deduct rental expenses on your income tax return

Generally, you can deduct any reasonable expenses you incur to earn rental income. However, when you rent only part of a building where you live, such as a room in your house, you can claim only the expenses that relate specifically to the rented part of the building. This means that you have to divide generic expenses for the property on a reasonable basis, such as the percentage of the total living area that is being rented. You also have to divide the expenses in line with the proportion of time the room is rented.

Example

If your annual electricity bill for your entire home is $1,000 and you rent out a room in your home for three months, you cannot deduct the full $1,000 as an expense. If the area being rented makes up 10% of the area of your home and the room was rented for three months, then the allowable expense would be $25 (10% x 3/12 x $1,000 = $25).

If you earn more than $30,000 of gross revenue over four consecutive calendar quarters through the supply of taxable goods and services, which includes the provision of short term accommodation, you are required to register and start collecting and remitting the GST/HST. Short term accommodation is defined as rental where the period of continuous occupancy is less than one month. Rentals of residential premises for periods of continuous occupancy of one month or more are exempt from GST/HST.

If you are a small supplier who earns less than $30,000 of gross revenue from accommodation sharing or other goods and services, you may voluntarily register to take advantage of the related input tax credits (prorated in the same manner as the expenses that are deducted for income tax purposes).

If you are already registered for GST/HST, you are required to collect and remit GST/HST on your short term accommodation revenues even if they do not exceed $30,000.